Uintah Basin Energy and Transportation Study
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Uintah Basin Energy and Transportation Study
Infrastructure and General Governmental Appropriations Subcommittee February 8, 2013
Cory Pope Program Development Director Utah Department of Transportation
A Partnership
• Uintah Transportation Special Service District (UTSSD) $700k
• Duchesne Special Service District $100k • Uintah County $100k • UDOT $200k $1.1M
Study Context
• Utah has significant oil and gas resources
• Higher quality and shallower wells
• Strong potential for job creation and economic growth
• Competition from other locations
Study Context
• Oil and gas extraction & mining comprise nearly 3% of State economic output
• Adds $1 B per year to State economic activity
• Uinta Basin produces about 70% of Utah’s oil and gas
• Oil and gas industry directly or indirectly responsible for nearly 50% of Basin employment
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
0
5
10
15
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1980 1990 2000 2010 2020
$ M
illi
on
Mil
lion
Bar
rel
Crude Oil (MMBOE) Utah State GDP ($M)
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
0
50
100
150
200
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1980 1990 2000 2010 2020
$ M
illi
on
Bil
lion
Cu
bic
Fee
t
Natural Gas (BCFE)
Utah State GDP ($M)
Study Objective • What is the likely path of growth for energy
production in the Basin? • Is transportation capacity limiting this growth? • If so, what is the opportunity cost of failing to
address transportation constraints?
Study Characteristics • Incorporates Risk
Analysis. • Transparent, repeatable
process • Combines analytical
models with academic and business knowledge
• Guided by a Steering Committee
Five Primary Components
Unconstrained Forecast: Based on Extensive Data Collection Extensive Data Collection Interviews with Industry
Participants
“Transportation limitations in the (Uinta) Basin mean we lose about 15% of the market price for crude oil.”
From Industry Interview
Entity Anadarko Berry Petroleum Co Bill Barrett Corp Citation Oil & Gas Corp ConocoPhillips EOG EP Energy GASCO QEP Ute Energy (acquired by Crescent Point Energy)- XTO Utah Petroleum Association Western Energy Alliance Oil Shale Operations Oil Sands Operations
Unconstrained Forecast: Significant Available Resources
MMBOE = Million Barrels of Oil Equivalent, BCFE = Billion Cubic Feet Equivalent. * All Oil Shale, surface minable oil shale considered in this study as a “likely to be extracted” resource
estimated to be 51,000 MMBOE, or which prospective producers indicated about 8,700 MMBOE in Contingent Resources on existing holdings.
** Prospective producers indicated about 950 MMBOE in Contingent Resources on existing holdings
Resource Estimated Undiscovered or Contingent Resource Plus Estimated Reserves
Source
Low Mid High
Crude Oil + NGL
200 Million BBL (MMBOE)
550 MMBOE 700 MMBOE EIA & USGS
Natural Gas 4,000 Billion Cubic Feet Equivalent (BCFE)
18,000 BCFE 50,000 BCFE EIA & USGS
Oil Shale* 77,000 MMBOE 111,000 MMBOE 226,000 MMBOE UGS
Oil Sands**
11,000 MMBOE 11,500 MMBOE 12,000 MMBOE Blackett Study (1996)
Unconstrained Forecast: Production could double by 2022
Network Capacities
191 N
orth -1%
191 S
outh
40%
US-40 East -25%
Rail
US-40 + Local Roads
Rail
US-40 West -15%
Pipeline Liquid
Pipeline Gas
Roadway
Legend
Excess Capacity: Roadway in 2020 based on UDOT data, Pipeline 2011 HDR Estimates
Gas W -20%
Gas E -20%
Liquids E -20%
Gas N
-15%
Production Loss Due to Transportation Constraints
$- $2,000 $4,000 $6,000 $8,000
$10,000 $12,000 $14,000 $16,000 $18,000
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
$ M
illi
on
About $30 Billion in Lost Production
Forecast Level Total (Undiscounted) Present Value @ 3%
Low $14,734 million $8,128 million
Mid $29,037 million $15,762 million
High $52,839 million $29,023 million
Opportunity Costs – Bottom Line (in $MM)
* Represents the portion of total macroeconomic output that is additional private citizen/corporate “profit” net of expenses and resource depletion. ** Assumes a 10-year term of employment
Revenues and User Benefits
Environmental and Social Costs
Macroeconomic Impact
Profit, Rents, Dividends and Private Royalties* $3,784
Site Emissions and Eco Impacts ($1,246)
Total Regional Output $34,794
State and Local Tax Revenue $2,756
Vehicle Emissions ($24)
Total Labor Income $11,791
User Cost Savings $4,943 Safety Impacts ($101) Long-term Jobs** 26,802
Total $11,483 Total ($1,371)
• Average Annual Production of over $1 B means: ▫ About 1% of the State of Utah GDP ▫ About 1/3rd of 2011 total Basin production ▫ Over 35% increase in GDP from oil and gas sector
• Average Annual Tax Revenue of $180 M
means: ▫ About 4% of total State tax collection ▫ About $3,500 for every resident of the two-
Counties ▫ About $25 Million to local schools each year –
20% of public education spending in Duchesne and Uintah Counties
• Creation of 26,800 jobs means: ▫ About 2.5% of total jobs in the State of Utah ▫ About doubling local employment over 30 years
What Do these Numbers Mean?
Thank You
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